Post#31: Setting up Purchase Order Invoice Matching

Invoicing Matching is a functionality to control the matching the control to match the Accounts Payable (AP) invoices against Purchase Orders (PO) only. 

This functionality allows us to configure both two way matching  (po vs invoice)  as well as three way matching (po vs grn vs invoice) 

First lets look at the Setup Details which are available in the AP parameters:

  1. This will enable the use of invoice matching. Enables Matching details button in the Review tab of the invoice displayed on invoice posting screen. 
  2. This will stop the posting of all non matching invoices unless approved specifically by the user. 
  3. Updates the flag on the invoice header status.
  4. Enables Invoice totals matching.
  5. Can display invoice total match error icon when lower or greater than user provided percentage tolerance.
  6. Acceptable percentage variance between expected invoice total and actual invoice totals.
  7. What policy to use 3 way, 2 way or none. You cannot use 3 way matching if you are not using GRNs. 
  8. Allows what can be overridden but this is not applicable if you have not defined any policy level
  9. Can display unit price match error icon when lower or greater than user provided tolerance amount.
  10. Select the type of tolerance to use for matching the total on purchase order lines with the total on invoice lines. Price totals matching can be used with either two-way matching or three-way matching. 
    1. None – Do not match price totals.
    1. Percentage – Compare the unmatched price total to a percentage that you enter.
    1. Amount – Compare the unmatched price total to an amount that you enter, in the accounting currency.
    1. Percentage and amount – Compare the unmatched price total to a percentage and an amount that you enter. 
  11. Can display price total match error icon when lower or greater than user provided tolerance amount.

Now with the above settings let us take an example of the below confirmed PO with 2 lines total AED 2600:

Now let us try and make an invoice for the same. You will notice 2 new sections in the PO invoice posting screen:

  • Match variance is a flag to check if there is any variance noticed overall. Variance approved will show if you have approved a variance.
  • Price Match and price total match will show any issue by line on either the unit or the total.

CASE 1: Let us try to receive more than what was on the PO by adding 1 quantity to the 2nd line:

Case 2: Now let us try to change the unit price to 450 from the original price of 500:

This time you will notice that the price match (unit) and the price total
do not match.  

If you need to check the details on the variances detected you can go to the review tab and click on the matching details:

Here you can see more details into the various discrepancies as show in the below image:

If you click on the more details button next to the invoice amount it opens up another smaller window which shows the invoice amount issue.

If you had setup post invoice with discrepancies as require approval then you would need to click the approve checkbox inorder to post the invoice.

I hope the steps were clear enough. Thank you again.

Keep Daxing..

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